Farm Bills, 2020

Rights. Rushed. Rebellion.

The monsoon session of parliament of India, 2020 passed three bills on farming and agricultural practices despite protests from opposition and certain unions of farmers also. SAD leader Harsimrat kaur Badal also resigned from the Union council of ministers as she contends that these bills are anti-farmer and they will destroy the agricultural sector in Punjab.

But, do we even know what these bills are and what changes they will bring in our traditional farming and agricultural practices? If no, then following is an attempt to explain these bills factually.

1. Farmers (Empowerment and protection) agreement on price assurance and farm services

The first bill which has been passed in Farmers (Empowerment and protection) agreement on price assurance and farm services bill. From the title itself, it can be inferred that the bill is to do something with the protection of interest of farmers on price assurance and farm services through some legal agreement.

In simple words, If a business owner or any company needs any type of crop or farming product, it will directly approach a farmer regarding that crop, be it wheat, rice, pulses etc. He will make a deal with him regarding the price, then according to this bill, he will have to make a proper legal enforceable agreement with the farmer that will include provisions about the price and the sale to protect the interest of the farmer. Companies will not be able to refuse to pay the agreed price irrespective of increased or decreased future market price and farmers will always sell their produce at agreed price only mentioned in the agreement.

So the words “farm services” in the name of the act implies that the buyer will specifically tell the farmer what crop is needed, what quality is needed, other demands regarding delivery etc. This is called contract farming.

The Government says that it will transform traditional Indian agriculture and attract private investments. Well, it will attract private investments in a manner that companies will come and explain their requirements, and to meet such requirements they often agrees to support small farmers through supplying inputs, assisting with land preparations, providing production advises etc

However, on the farmers side, the issue will be that the private contractors will legally dominate their farming and put the liability clauses on them. Also, most of the farming class in India are not that educated to understand the legal framework and clauses of the contracts. The sponsors may also not like to deal with small and marginal farmers. Therefore, there are high chances of exploitation of farmers by these private investors through legal clauses as big companies will always have a legal edge in case of disputes also and it is one of the major problems for the farming class and very genuine one.

2. The Farming Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020

Another bill is Farming Produce trade and Commerce (Promotion and Facilitation) Bill. It implies trading of farming products outside the local and traditional markets, i.e, mandis and APMC yards (Agriculture produce market committee).

Earlier, the farm products were sold and traded only in the definite mandis and APMC yards controlled and regulated by state governments.

Now, out of the three lists, i.e, union list, state list and concurrent list. Agriculture is a state list subject and these mandis are also regulated by state government, and through this act, as now farmers could sell their produce anywhere within their state or outside their state without any restriction, the state governments can lose a major share of their revenue income.

These mandis are spread across the nation and are approx. 7000 in number. Every state has their own APMC and spreads mandis across the whole area and if any person wants to trade agricultural or farm products, be it seller or buyer, they will have to trade through mandis only under the supervision of the state. The traders wishing to buy the products need to get a licence from APMC to be the licensed traders. There are restrictions on farmers to sell their agricultural produce in these mandis only, to avail MSP (Minimum Support price. However, small farmers who could produce in limited amounts only would consume for their survival and then sell the remaining directly to consumers, they even do it now as sometimes they do not even have enough resources and transportation to go to mandis. But, medium and large farmers who want their produce to be protected by the government and MSP had to sell their produce in mandis only to avail that facility.

In mandis also, there are a lot of middlemen between farmer and a consumer and it is an established practice that until the product reaches the consumer, its price is hiked by 75% through middlemen (most times statesman) and 25% of the product also gets wasted in transporting from here and there and all the formalities.

But now, this bill will allow barrier-free trade outside notified mandis and between states as the mandi system will be abolished. state governments will not interfere or impose any taxes on sale and purchase of agricultural products outside the mandis. There will be no middlemen.

Now this bill can be beneficial for the trade of big farmers as they will have more choices to sell their goods, such as, to private companies or anywhere they get more price for their goods. And as per for small farmers, it will hardly make a difference as they are already selling to consumers because they already did not have enough resources to reach mandis.

Basically, this bill is a way for the state governments to get out of agricultural business. Farmers could be squeezed between rising cost of cultivation and low prices in case of low demands. Also, private players that will be buying from these farmers directly are also very smart as they will try their best to buy at less price and sell at more price to earn more profits, which can again exploit farmer’s income.

MSP (minimum support price)

MSP is the agricultural product price set by the Government of India to purchase directly from the farmer. Indian government sets the price for 23 commodities twice a year. It ensures a minimum price for the auction of agricultural goods however, in practice, only wheat and paddy are the products whose MSP really works. It is a practice through which different traders auction for different products but there is a minimum price for that auction and farmers tend to sell to traders offering high rates.

But practically, traders form cartels and make a deal to offer the same price to farmers in order to get a low price just above from MSP or just the MSP.

3. The Essential Commodities (Amendment) Bill, 2020

Now, the third bill is an amendment in an already existing essential commodities bill.

Basically it is the law which controls and regulates production, sale and purchase of certain commodities which are essential for the living, i.e, necessities of life. These essential commodities are barred from creating artificial demand through hoarding etc.

Under this act, the central govt can amend the bill from time to time to include or exclude commodities as when the need arises, for example, govt included masks and sanitizers as essential commodities list in march so that producers and sellers cannot hike the prices for extra profit.

This amendment removed some items from essential commodities list so that the government can only regulate their prices in times of war, famine, or natural calamities etc. These commodities are food items such as cereals, pulses, potatoes, onions, edible oilseeds and oils.

Now, from the point of view of farmers, it will boost farmers' income as farmers can increase their price according to their profit while making deals with any company or business owner and by removing from essential items list, there is no restriction from the side of the government as to their necessity.

Govt said that they will interfere in these goods only when their prices will increase by 50% in retail price of non-perishable goods like cereals etc. However, in case of perishable goods like onions, the limit is set to 100% increase.

But on the other hand, these commodities are used and consumed on a daily basis by any normal household in India and their price increase can be a difficulty for middle class households. And as the government will not interfere now, there are high chances of hoarding and creating artificial demands and black marketing could be promoted.

Farmer’s Protests

There has been a lot of agitation and protests among farmers since day one of the passing of the acts in the various regions of the nation. Protesters are farming classes, agricultural leaders, opposition, etc.

Since the 25th november, 2020,

Thousands of farmers from Punjab, Haryana, Rajasthan and Uttar Pradesh have been marching towards national capital Delhi in the form of protesting against the bills. After failing to get any support from state governments, farmers decided to mount pressure on the Union government. While BJP governments in UP and Haryana have failed to convince farmers, governments of Rajasthan and Punjab have extended full support to their agitation. Farmers want the Union government to either withdraw the three legislations or guarantee them the minimum support price (MSP) for their crops by introducing a new law.

In October, a month after the three farm legislations were enacted by the Centre, the Punjab Vidhan Sabha convened a special session and not only rejected the laws by a unanimous resolution but also passed three farm amendment bills which removed Punjab from ambit of these bills. Farmers enjoy immense support in Punjab from both ruling and opposition parties. That was the reason farmers in Punjab kept protesting, blocking rail and road networks, since the state government extended its full support to them.

However, in Haryana,

except for the ruling party BJP and its ally JJP, all political parties are backing farmers in their protest. They have openly supported the farmers’ agitation. It suits the opposition in Haryana to keep hammering the BJP on farmers’ issues and mounting pressure on the JJP to blackout from the alliance. But now, every attempt of the government has failed to explain the bills to farmers.

The situation is extremely volatile since the farmers are determined to enter Delhi and camp there. Farmers are carrying ration that can last months and are in no mood to turn back. Any use of force by the state may lead to a major law and order disruption. To enter Delhi, farmers have to cross through Haryana’s territory. The Haryana government has failed to prevent the swelling crowds of farmers that were coming in from both Rajasthan and Punjab — Congress-ruled states. These farmers faced multiple flashpoints with the police in riot gear using tear gas, water cannon, barricades and barbed wires upon entering Delhi, which was very uncalled for as farmers were only protesting peacefully and demanding central government to take back their bills.

The protesting farmers gathered at Delhi’s Tikri border proceeded in trucks to Burari on late Friday after they were allowed to stage demonstrations at the Sant Nirankari Ground as they demanded an open site for carrying out their protest. Union agriculture minister Narendra Singh Tomar has assured that government is ready for talks with the farmer unions on December 3. He also asked all political parties to avoid ‘playing politics in the name of farmers’ and said that he hopes to meet the farmers during the meet.

Conclusion

Any policy or rule can be success or failure depending mainly on its implementation. It is not about whether these bills are good or not? It is about whether this behaviour with farmers is good or not? Every law has some loopholes and these bills are no different. Being in a free democracy, farmers deserve an explanation and they are demanding it and the government is obliged to answer them, and not suppress them. Why are they silencing those who are demanding their rights and answers only?